tv Bloomberg Markets Americas Bloomberg August 12, 2019 10:00am-11:00am EDT
york, 3:00 p.m. in london, and 30 minutes into the trading day in the united states. from new york, i'm vonnie quinn. guy: from london, i'm guy johnson. ."is is "bloomberg markets vonnie: stocks are down. the 10 year yield just moved there. the yen makes a bid into safety. the mexican peso is weaker by 1.25%, partially because in argentina, we saw a shock vote, which means the politics are more likely to come back into focus now as the electorate goes to the polls in october. the argentinian peso is weaker 27%. bonds also seeing it. we will be talking about this story in more depth in just a few moments. guy: european stocks started a
day of positive territory, but have subsequently rolled over. that happened mid morning, and now we are moving along the bottom. volumes ok, not great. the stoxx 600 is down by 1/10 of 1%. banks and airlines are down. the hong kong story front and center. that seems to be the pivotal factor for european and asian markets as people fear what could happen in hong kong. the italian 10 year yield got a little bit of a respite friday. we still have the political story rumbling along. as a result of which, yields are rising, so prices are under a little bit of pressure. keep an eye on the politics. british pound traded near 1.21 earlier on. couldn't quite make it. vonnie: we are following that mounting turmoil in hong kong. authorities canceling flights after violent protests. announcing they are
working to reschedule flights from six clock a.m. local time -- from 6:00 a.m. local time. man.fore us now is yvonne give us a picture. there is still a lively bunch now, but it has gone down from thousands of people packing the arrival halls now to a couple hundred or so. hong kong airports already saying they have never had to shut down the airport and cancel flights like this before. yes, we've seen some weather events like typhoons because disruptions, but never something where it was unrest that led to flights being canceled. unclear yet just how many have been impacted. behind me i counted probably close to 130 flights tonight that have been canceled. we still have seen some flights arriving to hong kong, but as he
mentioned, the airport authority is working to restore those operations as early as 6:00 a.m. local time expec -- local time. expect a pretty hectic morning given what we have seen so far. guy: this is a huge provocation. shutting the airport down is a big step forward in terms of the escalation surrounding hong kong. is that the purpose? are the protesters trying to provoke beijing into taking action? i think at this point, it is really to cause disruption, as you mentioned here, and perhaps get the attention of beijing. what we have seen is that both sides, the protesters, the government and police, have ratcheted up and hardened their stance. over the last weekend, we saw some violent clashes with protesters, surrounding police headquarters and disrupting public transportation.
when it comes to also throwing bricks or the petrol bombs as well, the police also getting more aggressive. they were firing tear gas into subway stations for the first time that we have seen. also, some officers were undercover, wearing black t-shirts and infiltrating these protesters and arresting them. beijing as well ratcheting up the rhetoric. they have been talking about how these are serious crimes the protesters are committing, and seeing signs of terrorism. vonnie: that is a serious escalation in rhetoric. at what point does it because a lot -- does it become a lot more probable that this becomes a military event? this point, we haven't seen any signs of that. they continued to back carrie lam, the chief executive. they continue to back the hong kong police force. we've been speaking to experts and officials who have set at this point, the government tactics may be working.
their strategy right now is to wait this out. don't offer any major concessions and wait for these protests to fizzle out. perhaps want the -- perhaps once the summer vacation is over and some of these students get back to school, things will fizzle out. at this point we have seen the crowds get smaller. not the 2 million we saw weeks have marked 10e straight weeks of protests. potentially it is getting a little more violent as well. the hong kong police showed off new water cannons as well. perhaps they are getting prepared for further escalation if they need it. vonnie: yvonne man, bloomberg correspondent at hong kong's airport, thank you for that. for more on the situation in hong kong and the application for global markets and investors, we are joined by jason draho, ubs wealth management head of american
asset allocation. what do you think of the events we are witnessing? i think they will start to wonder how this spills over into the u.s.-china dynamic. you are trying to deal with the u.s. and the situation in hong kong, and don't want to show weakness on either sides. it could have applications for how china deals with the u.s.. the u.s. and minister has to think about how to respond to hong kong. it has been an ally. do they support it? it just adds competition and more uncertainty to a situation that already had elevated uncertainty. we might start to get more specific questions on hong kong as this escalates because things are clearly ramping up, and thus far has been about china specifically. vonnie: what is your base case for the situation between the u.s. and china as trade rhetoric ramps up and other events start to play into that? jason: base case is that we get the 10% tariff on september 1,
about a 50% chance. right now we think there's more risk of further escalation, so the 10% goes to 25% rather than a deal in the near-term. we can see china being occupied with hong kong on the 75th anniversary of the forming of the communist party. given that, it feels like tokets will be hard for them retire. guy: this is impossible to kind of answer accurately, but i am going to ask anyway. how big a market event would it be if the chinese send the army into hong kong? jason: that is a tough question to answer. you certainly would see a risk off environments for a couple of days. i think it depends exactly on how they would intervene, what it means in terms of is it trying to calm the crowds or a more forceful takeover. that would indicate what else the current chinese leadership
would do. ultimately, what we can try to calibrate is what is the economic impact. clearly it would be negative for hong kong, but does have broader spillover into other regions? does it indicate how the chinese are going to deal with the u.s. on trade and other matters? you have to calibrate different scenarios to see what is the economic impact. once you get past the headline economic impact is probably relatively contained to hong kong. the actual selloff inequities would be modest. you would probably see it continue to decline because of uncertainty and a flight to safety. guy: the venn diagram of the hong kong situation and the chinese trade story is obviously becoming more and more overlapped. one area in which we could see that further exacerbated would be the hong kong dollar, currently pegged to the dollar. hong kong has this special
status that exists. how keen do you think the trump administration would be to avoid further overlap? you wonder whether or not the situation escalates further and that link may be put on the table, that special status of hong kong. that would presumably have an impact into the trade narrative as well because the chinese would not take that well. jason: that is the difficult thing to calibrate. we had this long-term peg supported by the u.s., but we are in an environment where all bets are on the table, so to speak, for dealing with currencies. it's not unrealistic to think there could be a tweet or something from the administration to question whether they would support the peg, and that alone could lead to capital outflows empathy peg under pressure -- outflows and put the peg under pressure. whether you want to bring that to the table right now in an environment where there is already uncertainty, i would expect they wouldn't want to go that direction.
you need some probably forceful statement that they will support it because that is critical. they can deal with other matters elsewhere, but this is kind of the unknown. how interested are you in asian assets? for example, this week we get some of the bigger chinese adr earnings, from tencent to alibaba. then yields on chinese debt are around 3% right now. it looks like there is money flowing in there, looking for safety. are you recommending any kind of chinese assets to your customers? jason: you have to think about it tactically and strategically. with the trade situation, it's been very volatile. if you like china, you have to like yen overall.
like east asian assets, equities in particular. another thing we like is emerging-market sovereign debt. it gives you nice compensation for the risk you are taking. higher credit quality versus u.s. high-yield. same kind of total yield. you have to get a big chunk from asia over there. long-term structurally speaking, you look at where you're going to get gross, you are going to get it from chinese companies. long-term perspective, as those markets open up, you need to have some allocation. that is a long-term view not concerned with the next three to six months. guy: you bring up the emerging markets and the debt. the big question i'm talking to a lot of people at the moment at to understandg whether investors are positioned for a weaker dollar. it is clear they are not positioned, but if they are ready and thinking about a weaker dollar. what is the dollar were to weaken? at some point it has to turn.
what happens when it turns? jason: if it is a case of the said easing to try to weaken -- of the fed easing to try to weaken interest rates, you see a gap between u.s. interest rates and the rest of the world because dollar strength has materialized as the rest of the world is slowing. that is actually generally positive for em equities. the correlation between the dollar and em currencies as a basket overall, that is one of the best predictors. dollar weakness would actually be positive for emerging-market assets at this point in time. vonnie: we will leave it there. our thanks to jason draho, ubs global wealth management head of america's tactical asset allocation. let's check in on the bloomberg first word news. . here's kailey leinz. kailey: an autopsy has been performed -- here's kailey leinz. kailey: an autopsy has been performed on disgraced financier jeffrey epstein, but says more
evidence is needed to determine a cause. he had been on suicide watch, but was taken off recently. epstein was jailed on sex trafficking charges. saudi aramco is making headlines today. the world's biggest oil producer is taking 81 to present stake in india's reliance industries. the company holds its first-ever earnings call today, preparing to go public as soon as next year. in the u.k., new prime minister boris johnson is accused of spending for votes, not fixing the economy. he says he will spend up to $3 billion on prisons and a crackdown on crime. he has also announced multibillion-dollar spending plans on brexit prep and the national housing service, all in speculation he's planning for an early election. in argentina, the peso plunged after a shocking primary
election defeat for president mauricio macri. if the result stands in october's election, he could lose the presidency out white -- presidency out right. he's known as a business friendly president. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. guy: thank you very much indeed. coming up, markets in argentina are on a ride today. will it spread to other em nations? we are live in why does harry's -- in buenos aries next. this is bloomberg.
♪ vonnie: live from new york, i'm vonnie quinn. guy: from london, i'm guy johnson. this is "bloomberg markets." on those markets -- let's get an update on those markets. here with the details, emma chandra. emma: the u.s. opening in the red, following europe and hong kong stocks into negative territory. we are pretty close to the lows of the session for the s&p 500. also, look at that trading below 2900. we are now off about 2.8% so far this month and it comes to the s&p 500 in particular. we've got a number of geopolitical tensions playing into this. the trade stalemate between the u.s. and china remains tense. we are looking at the reemergence of some political chaos in italy. and of course, we are seeing what we heard overnight which really soured markets, and hong
kong, the escalation of protests there. that's before we even get to south america. the peso tumbling before the shock primaryhe vote in argentina over the weekend, which suggests the more business friendly president macri will not be in office later this year. we are seeing stocks fall in argentina, surging bonds. we have a chart here which shows you the price of argentina's sovereign century bonds. that has tumbled by the most since 2017. the yield now reaching some 12.6%. finally, that means good news for havens. gold looking ever more shiny today, back trading above $1500 an ounce. we should be able to show you a chart over the course of this year, up some 80% this year. guy: thank you very much. let's get back to the situation in argentina. the peso has plunged to a record low against the u.s. dollar
after president mauricio macri unexpectedly lost the primary vote by a landslide, foreshadowing defeat in october's presidential election and a possible return to the policies of his predecessor. airesg us now from buenos is our buenos aires bureau chief. a big surprise to the markets, reacting very violently. does the market reaction make it harder for macri to turn this one around? reporter: well, it's going to be hard to turnaround either way. it was a much larger defeat than expected, almost twice what pollsters had been predicting. we are seeing a bloodbath across the board in argentina, especially in the peso. vonnie: what kind of policies are markets fearing here? carolina: we are talking about return to from a
previous policies, a return to intervention in markets, more combative policies against argentine farmers, one of the most productive sectors in the a more combative attitude toward the international community overall. we have to recall that the previous president was more aligned with countries like venezuela. it is certainly going to be a big turnaround for argentine policies and for the outlook for the country. guy: why did the polls get it so wrong? carolina: we seem polls around the world have shown increasingly they are less and less reliable. in argentina we have another issue, where the regulations to behat polls don't have that transparent on who is financing them and their methodologies. that also meant that this year more than in previous years, we saw pollsters keep their polls private instead of
publishing them in conjunction with newspapers or other outlets. ony were reporting rumors poles sent to a selective -- on polls sent to a selective number of clients. vonnie: at what point will there have to be intervention? carolina: that's a great question. we know that the central bank has permissions and firepower from the imf in the stock market and the futures market. it had been intervening in the futures market in the lead up. far, the argentine peso is headed for its worst loss ever in a single day, even possibly whend as when -- as bad as they took on capital controls into any 15. -- in 2015.
carolina, why is this happening? what is it about macri s policies -- about macri's policies that people don't like? what have people turned their back on? curious to whyf his term in office so far has not been as successful. carolina: you have to look at the data. it is showing that the economy is really hurting for the average argentine, not to mention companies. argentines are hurting. is up, unemployment is up, and the peso is weakening and weakening. rememberhave to
that for argentines who have , it is a key gauge of the economy. the central bank hiked key rates to the highest in the world. they've now come down, but for small businesses and for consumers, taking out credit is harder than it's been in the long -- in a long time. all of these have weighed on the sentiment. to carolinathanks millan of bloomberg news. for our continuing coverage of argentina, check out our live blog. this is bloomberg. ♪
latest bloomberg business flash, a look at some of the biggest business stories in the news right now. facebook is taking part in a 101 $5 million funding round -- and a $125 million funding round for meesho. to five yearshree to reorganize, according to an internal memo. major structural shifts are around the corner. that is your latest bloomberg business flash. this is bloomberg. ♪
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here with the details, kailey leinz. authorities and hong kong canceled remaining flights today after protesters jammed the main terminals for the fourth day in a row. the airport plans to reopen early tuesday. all of this comes after recent violence in hong kong. police used tear gas and rubber theets to try to break up crowds. drama over jeffrey epstein may be over his mysterious estate. lawyers representing compensation for victims of his alleged crimes want it frozen for now. -- germany g.m. body
is set to get rid of the so-called solidarity tax that helped finance reunification. the 5.5 percent income tax will be eliminated in 2021 for most of those paying it. there's increased pressure for stimulus in europe's largest economy. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm kailey leinz. this is bloomberg. vonnie: u.s. stocks are lower to start the week. financials and energy the biggest drags on the s&p 500 right now. we also have a media deal being hammered out between the likes of cbs and viacom. viacom shareholders don't seem to be like the terms we are hearing about. reporter: some of the reporting out there, specifically dow jones, talking about a slight premium for cbs shareholders, and as far as the deal being finally done, if it gets done,
this has been talked about so much over the years, it is kind of the challenge of putting humpty dumpty back together again because these companies were under the same corporate roof until the early to thousands when they were split 's when theyrly 2000 were split up. it shows you the difficulty they have been making it all fit, setting up the management, talking about a stock deal with the exchange ratios, all of these sort of details. let's just say it is not going easily. guy: i'm really curious about why not. since 2006 come of these companies are split apart. why is it so hard to put them back together again? what is it about these two businesses that don't fit neatly back together? what has changed? avid: it may be more of matter of personalities then the businesses themselves. if you think about the rationale for splitting up this company,
it was supposed to be that viacom was going to be the growth area, cbs the traditional broadcast that maybe wasn't doing so well. it hasn't worked out that way. viacom has really struggled, in part because the cable networks are under such pressure in terms of being able to keep their position on cable systems and get the kind of fees that some of their peers are getting. when you put it altogether, it is sort of like viacom has the upper hand. explain why the terms are what they are. vonnie: you also have a couple of boards with a history of infighting trying to hammer this out. david: absolutely, and sherry redstone, whose father put the pieces together and then split them apart, being the biggest shareholder of both companies. sherry wanted to make things happen. you put things altogether, maybe you don't put it all together so easily. vonnie: six seats in the new
board would be designated for cbs, two for national --sements, and the rest david: the redstone holding company. what is going to get them out of the hole? david: look at what is happening with interest rates. you seen the 10 year yield come down to the lowest level since 2016. it's also the 2-year note relative to the 10 year. you're talking less than 1/10 of one percentage point at this point. it gets a whole lot harder to make money if you are a bank and you are trying to lend, and your benchmark rates are coming down. that's the challenge these lenders face. it certainly not just the u.s. by any means. it may be more acute in europe
at this point. but put it altogether, and it just shows you that this is an industry that is going to have a real plight on its hands given the way rates are going, and given weaker economic growth at a minimum. it just doesn't serve them well. vonnie: what is the story with energy companies? saudi arabia basically giving a whatever it takes speech last week, and oil is pretty supported. yet, energy is now a huge drag. david: it is more of the same as far as the stocks go. it's been an area of weakness. just pointing out how much investors have shunned of a group, concerned about the bigger transition away from fossil fuels that is in progress, thinking about electric cars, that sort of thing. when you put it all together in that case, it really does speak
to the bigger story that goes beyond just the day-to-day of saudi arabia, the price of crude. that bigger shift that is really playing out in the energy stocks. guy: when does this become a problem? point, the drop in some of these is pretty epic. the onshore companies have suffered more than the offshore companies. but these are heavily geared businesses. they rely on debt to finance what is a relatively expensive business. at what point does that debt gearing become an issue? david: that's the bigger question because you expect to have the cash flow to be able to cover that debt. a lot of it is tied into market prices in the sense that got to be able to generate the cash. it is going to be an issue down the line. from a stock market perspective,
the one thing you can't say is because this has been going on for some time, increasingly energy stocks just don't make up so much of the benchmark indexes these days. they are a lot smaller share of the s&p 500 then they were several years ago. if you are thinking about it in terms of that broader market perspective, maybe not much of a concern. vonnie: dave wilson, thank you. don't forget, dave has his own bloomberg code. from new york and london, this is bloomberg. ♪
this is "bloomberg markets." jeffrey epstein died saturday in what federal authorities are calling an apparent suicide. there are questions around his death, and attention is now shifting to his estate. lawyers for the alleged victims of his crimes once them frozen. here with us now is heather smith. counted?s estate even where are the assets, and are they all discoverable? >> for now, we just don't know. we know about the properties he has. he has a home on the upper eastside in manhattan. he has one in palm beach, florida. he's got an island to himself in the u.s. virgin islands. he has a ranch in new mexico, as well as a home in paris. however, he did not turn over a full accounting of his financial situation when he was arrested. he submitted just a one page summary. when they searched the manhattan
residents, they said they found , i think,000 in cash 50 loose diamonds. they said there is just no way they had the full scope of his wealth. guy: given his situation was precarious, what kind of things could he have done to protect his estate? heather: certainly if he relocated his business, now registered in the virgin islands , there's certainly offshore accounts he could have used there. there were reports that the estate that his friend had in new york, that that was bought through an unnamed fund, but based out of his office. so certainly i would think offshore funds would be the surest way. vonnie: who might have a claim on some of this, and what can prosecutors do to try to get their hands on it? heather: the interesting thing
is that when he was arrested, they tried to seize the manhattan house. they weren't able to complete that fully. they've searched it, but with his death, the criminal case against him ends. that goes over now to being a civil forfeiture suit. what prosecutors would have to do to go after the assets would be to sue each individually to try to claim them. presumably, since they are continuing to pursue the conspiracy investigation and have continued to ask for more victims to come forward, there would be a possibility to arrange for compensation through some sort of dispensation once the investigation was carried out, but it does become a quite difficult and lengthy process. vonnie: heather, you will be on top of it throughout. our thanks to you. that is heather smith, executive editor of legal news here at bloomberg. guy: time now for a look at some of the biggest business stories
in the news right now. let's kick thing off with shares in germany's commerzbank falling to a record low today. that's capped a roller after theye announced a turnaround plan. gains evaporating over the past year and a half. swedish company saab is leaving, wanting to face another operational challenge in his career. he plans to stay until there's a new ceo. shares have gained an average of 18% under him, beating industry peers. let's turn our attention to the stock of the hour, focused on luxury goods player lvmh. emma chandra is here with the
details. emma: this is linked to those ongoing protests in hong kong and the escalation we saw overnight at the airport, forced to close and cancel flights amid the disruption. lvmh'sxcluding japan, is biggest revenue source. goodsnot the only luxury maker affected, the index itself underperforming the broader market. for those stocks, asia is important, too. tiffany opening significantly lower in the u.s. today. hong kong is a historically important market for luxury goods. it represents about 5% of the sector sales according to ubs. still, luxury goods sales have fallen since their peak in 2013 , and continued disruption in hong kong could continue this trend.
there have been predicted double-digit inclines in sales for the same period 2018. the u.s. have china -- the u.s./china trade war hurting the market at home and abroad. we are looking at the global luxury goods index in white here. you can see that in the last few ce ofs, underperforman luxury goods has tended to escalate. with no resolution of hong kong issues or the trade war inside at the moment. vonnie: thank you for that. lvmh there. still ahead, argentina assets getting battered after voters turn on president macri. 31%.eso weaker i almost we will take up -- weaker by almost 31%. we will take a look, next. this is bloomberg. ♪
♪ guy: from london, i'm guy johnson. vonnie: in new york, this is vonnie quinn. this is "bloomberg markets." guy: saudi aramco is buying a 20% stake in the refining and india'ss business of reliance. discussed it with bloomberg earlier today. the gold in the company upstream is to retain our position as the largest crude oil producer, while downstream
we will further diversify our operations and increase production. guy: we are joined now by bloomberg's annmarie hordern. the call was just finished. what did we learn from it? what did they say about the ipo? says, and theyo told matthew martin, our bloomberg news reporter who spoke to the cfo, aramco is ready in-house for an ipo to happen. they say it is up to the saudi government. all year they have been becoming a little bit more open to the market. they had perspectives before the april bond sale, which had a lot of interest from the market, that $12 billion. today for the first time ever, they release results and have an earnings call. they are tiptoeing their way to become a more publicly open -- to becoming more publicly open. there are still a lot of questions though. how do you unravel the ties
between the saudi government, the royal, and aramco? because many -- the royal family, and aramco? because many will say they are one and the same. vonnie: it feels like we have been waiting for this ipo for such a long time now. annmarie: it was said this stalledhat it was never , but was just on hold for a bit. on the call, they did say the fact that it has to be up to the shareholders when to do it, and that would be up to the market. there's a few things. i think they want a higher oil prices before they would take this kind of company public, and yet they have to open up their books. a lot of people have questioned whether or not they would want to get involved. what kind of structure does it look like when you have the government so entwined with the company? they have arbitrary royalties. does that change when the price of oil changes? you have opec deals, but then
aramco executes. what does that look like if you are an investor in the company? guy: if you are an investor in the company, can you expect the same kind of dividend that was just delivered? because it is i watering. -- it is eye-watering. the dividend was about the same as the income, about $43 billion. this is going to the one shareholder, the saudi government, and they need this to finance everything. social spending, the military, the lavish lifestyle of the royal family. that is another huge question. they are possibly signaling to investors that there is going to be cash to pay out, but into or three years' time, is it going to be that type of dividend? vonnie: what type of oil price are they targeting at this time? annmarie: the budget is anywhere
between $80 and $85 a barrel. they say they do not target price, but clearly it is definitely their budget links to a much higher price than we are -$60 with brent trading sub a barrel. the next question for the kingdom is how do they prop up prices. this is a huge question for opec, whether or not they cut more production to boost prices. some saying opec needs to cut at least another one million barrels a day to get $60 for oil. that would be great for a buttry like russia, definitely still too low for the kingdom. guy: are the russians and the saudis on the same page? annmarie: at this moment, they are likely to be on the same page. we know the ministry was calling up other producers, the
russians, to talk about what their options are with these kind of prices. the market clearly focused on demand, but there's also another story that the balance of power is shifting. czar,is the world energy and you see it in the bank reserves. the saudis are burning through their reserves far faster. guy: thank you very much, bloomberg's annmarie hordern. vonnie: time for futures in focus now, continuing this to a degree. joining us now from the cme is scott bauer. we are starting the week lower in equities and yields, but oil prices seem to be supported. what is your outlook for the rest of the week? scott: specific to oil, i think it will be lower unless we see a big ramp up in the tensions between the u.s. and china. even with all of the speak coming out of saudi and potential production cuts, the big thing really weighing on the market is global growth demand. andiea came out on friday
lowered their forecast for the rest of this year and going out to 2020. vonnie: it is interesting because one asset class that has been trading very independently to most everything else, even the u.s. dollar to an extent. do you see any correlation? scott: not right now. in the long-term you see a correlation, but right now it has split apart a little bit. the u.s. dollar is as strong as it has been and continues to be strong, and yet there's all this pressure on the oil patch. we saw the two-tens spread below 10 basis points. are we over the hump, or still in for some pain? scott: we were over the hump, but this is such a fluid market that anyone bit of information can make the market move one way
or the other. what we saw is president trump came out and said we may delay these talks. that put a bit more uncertainty into the market. that's why uncertainty is down. that's why the equity market is down. that's why there is a push up in bonds, and rates coming back down again. vonnie: what kind of trades will you be putting on overnight? scott: i'm looking really selectively, especially in the financial space. jp morgan, goldman sachs. if these things come down another quarter percent or so, i'm looking for some entries there. vonnie: all right, scott bauer of prosper trading academy, thanks for joining us from the cme today. coming up, we head back to hong kong as protests enter the 10th week there. we are live to get you up to speed on the travel restrictions. let's check u.s. markets now. it's been a down day for major indices. the s&p 500 down 6/10 of 1% now,
just at the 2900 mark. you have oil companies and viacom down more than 3%. the 10 year yield at 1.67%. the at 19.6. this is partially why, because of the argentinian peso weaker by 25%. guy: absolutely. that story and the situation in hong kong really the stories the market is worrying about right now. the pound getting a bit of a boost today, not quite making it through 1.21. european stocks are down. not break volume. this is bloomberg. ♪ from the couldn't be prouders
european trading day. from london, i'm guy johnson. vonnie: in new york, i'm vonnie quinn. this is the european close on "bloomberg markets." taylor: european markets -- guy: european markets started off well. down now on the stoxx 600. interestingly enough, we do have a situation with italian bond markets selling off today. high yields are rising. the rating agencies kind of gave italy a pass on friday, but the political situation is at risk. we will talk about it later on in the program. the british pound got close to 1.21. didn't quite make it, 1.28, but but ale higher -- 1.208, little higher. vonnie: